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Homebuilder Confidence In U.S. Increases To Five-Year High

By Shobhana Chandra – Aug 15, 2012 9:10 AM CT

Confidence among U.S. homebuilders climbed in August to the highest level in more than five years, affirming the improvement in residential construction.

The National Association of Home Builders/Wells Fargo builder confidence index rose to 37, higher than projected and the best showing since February 2007, according to figures from the Washington-based group released today. The median forecast in a Bloomberg survey of economists called for no change from July’s 35. Readings below 50 mean more respondents said conditions were poor.

Confidence improved among builders in two of the four U.S. regions, led by the Midwest, where it rose to 42, the highest level since October 2005, from 33 the prior month. Photographer: Daniel Acker/Bloomberg

Aug. 14 (Bloomberg) — Mark Kiesel, portfolio manager at Pacific Investment Management Co., and Robert Shiller, an economics professor at Yale University and co-creator of the S&P/Case-Shiller index of property values in 20 cities, talk about the U.S. housing market. They speak with Trish Regan and Adam Johnson on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Builders such as PulteGroup Inc. (PHM) are benefiting as less- expensive properties and record-low mortgage rates entice buyers. At the same time, faster hiring and fewer foreclosures are needed to bring about bigger gains for the industry that precipitated the worst recession in the post-World War II era.

“The outlook appears to be brightening,” Barry Rutenberg, chairman of the NAHB and a builder from Gainesville, Florida, said in a statement. At the same time, “there is still much room for improvement.”

Other reports today showed production at factories, mines and utilities climbed more than forecast in July, and consumer prices were unexpectedly little changed.